What does the European Commission’s antitrust ruling mean for Google Shopping?
On 27th June, Google was fined £2.1bn by the European Commission for breaching antitrust rules by promoting Google Shopping's comparison service at the top of the SERP. With only 90 days to comply with the ruling, what’s in store for advertisers?
The European Commission has ruled that Google abused its dominant position in the search engine market and gave an illegal advantage to another Google product, its own comparison shopping service. Initially launched as Froogle as a beta in late 2002, it was later renamed Google Product Search and then finally Google Shopping as we know it in 2012 with the move from free to paid product listings. The average consumer doesn’t picture Google as a comparison shopping engine, but since May 2016 there has been a real push to ensure GTINs are correctly linked to products in shopping feeds. This paved the way for some shopping ads to list the same product from a choice of manufacturers with a direct price comparison.
The European Commission ruled that Google abused its dominant position.
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While this provides a useful format for very specific searches for brands with identifiable makes and models, the majority of broader searches returning shopping ads are instead a showcase from manufacturers or resellers advertising products related to the query. This is more of a window-shopping, catalogue-browsing experience and is in no way, shape or form price comparison shopping.
It wasn’t the comparison ad formats in particular but rather the whole Google Shopping offering which has sparked this ruling and left many of us scratching our heads. Commissioner Margrethe Vestager said: “What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation."
You can read the full press release here.
Google now has 90 days to stop this illegal conduct and comply with “giving equal treatment to rival comparison shopping services”. If they do not comply, Google will be liable for payments of up to 5% of Alphabet’s average daily turnover. Ouch.
What does this mean for us as advertisers?
Across all our clients running both search and shopping activity last month, 59% of clicks came from shopping campaigns. Shopping is a staple of performance marketing strategies and often sees stronger return on investment compared to search campaigns for the same queries due to the nature of the ad format. It’s easy to see what you’re buying, where from and for how much without having to click on all the search ads on the page and make your decision from each advertiser’s landing page instead.
There has been no official word from Google AdWords yet, but it’s clear there will be no easy or quick fix. As an advertiser, there are a number of things you can do to get yourself in the best position should any changes come about in the near future.
- Get your shopping campaigns and Merchant Center feed in tip top condition. Set up custom labels to push key performing products, and ensure your campaign priorities are surfacing the products most valuable to you. If the number of shopping ad slots is reduced or we start to see fewer queries triggering this ad format, it’s going to get very competitive.
- Ensure you have search campaign coverage for all of your shopping products. Dynamic Search Ads (DSAs) can plug the gaps in your keyword coverage, especially if you have a large catalogue of products on site, and you can use DSAs with business data feeds to guarantee coverage of all your product pages.
- If you’re using DoubleClick Search (DS), now is the time to set up inventory management on your search campaigns. This can be used to build search campaigns using the contents of your shopping feed, update your search ad copy with availability and pricing, and pause/enable ad groups based on stock levels. If you don’t have access to DS, AdWords scripts can be a big help here to take care of some of these tasks for you instead.
The only real options for Google from here are:
- Add links to competing price comparison services to the SERP;
- Reduce the current features and the types of search queries which trigger shopping ads (for example, removing the ad formats which compare one product from multiple advertisers);
- Pull Google Shopping from Europe completely.
Or, most likely, Google will appeal the decision. This would be a long and painful process which would leave Google Shopping in limbo for years to come, whilst ongoing investigations into other services continue where Google is also considered to hold the dominant position. These include:
- The Android operating system, where “the Commission considers that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system”, and
- Adsense, where Google is accused of preventing “existing and potential competitors, including other search providers and online advertising platforms, from entering and growing in this commercially important area”.
Any move to comply with the European Commission’s ruling will cut into revenue for Google and advertisers alike. If that’s not bad enough, the ruling has also paved the way for rival comparison shopping services to bring their own lawsuits.
We also have to ask, what else could Google be targeted for holding a dominant position over. Maps, for example? And who might be next on the European Commission’s list for investigation beyond the search engines?
Jocelyn Le Conte is group head of search at Merkle | Periscopix
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